Cans of Dulux paint, an Akzo Nobel brand, are seen on the shelves of a hardware store near Manchester, Britain, April 24, 2017. REUTERS/Phil Noble

Akzo believes that PPG’s third acquisition bid, which was unveiled on April 24, still does not value the company highly enough, especially in light of Akzo’s plans to unlock value by exploring a spin-off or sale of its speciality chemicals business, and the risks it sees in the potential deal, the sources said.

However, Akzo is studying several scenarios about how to move forward, mindful that several of its shareholders want it to engage with PPG in negotiations. Activist hedge fund Elliott Advisors has been trying to oust Akzo’s Chairman Antony Burgmans to put pressure on the company to talk to PPG.

Among the options being considered by Akzo is talking to PPG only about some of the issues that would affect the deal, such as antitrust approval risk, or rejecting it outright without any engagement, the sources said.

This is because Akzo is concerned that engaging with PPG in comprehensive deal negotiations would weigh on its prospects of getting PPG to improve on its offer much more, according to the sources.

No timeline has been set for Akzo’s response to PPG, the sources said, asking not to be identified because the deliberations are confidential.

Akzo and PPG did not immediately respond to requests for comment.

PPG said last week its latest acquisition proposal was worth 96.75 euros per Akzo share, comprised of 61.50 euros in cash, 0.357 shares of PPG common stock and dividends worth 7.78 euros.

That’s a 50 percent premium to Akzo’s closing price of 64.42 on March 8, the day before PPG confirmed it had made a proposal to buy Akzo at 80 euros per share. Akzo has been arguing this premium does not factor in the value of its announced plans to shed its speciality chemicals business.

PPG has said it has no plans to break up Akzo following an acquisition. It has also said it plans to submit a formal offer for Akzo to the Dutch financial markets regulator by June 1, regardless of whether Akzo chooses to engage.

Elliott has been seeking to call an extraordinary meeting of Akzo shareholders to oust the company’s chairman, a move that Akzo has been resisting.